Newmont Mining Corp. (NEM), the largest U.S. gold producer, is emphasizing on exploration near its existing mines in Nevada to bolster its reserves. Newmont is exploring 18 deposits near its existing mines, which could add 4 million to 7 million ounces to its gold reserves.

Based in Colorado, Newmont is trying to boost reserves to benefit from historically high gold prices. In June, the company concluded its purchase of the remainder of the Boddington gold project, the largest in Australia, from AngloGold Ashanti Ltd. (AU). The $2.9 billion mine will have an annual capacity of about 1 million ounces at a projected cost of $300 an ounce.

Newmont’s gold sales fell 5.7% to 1.2 million ounces in the second quarter. After which the company lowered the higher end of its 2009 gold sales forecast range to 5.4 million ounces from 5.5 million ounces. The company sold 5.2 million ounces of gold in 2008.

Newmont also boosted the reserve estimate of its Minas Conga copper-gold project in Peru to 11.8 million ounces of gold and 3.2 billion pounds of copper from the previous forecast of more than 6 million ounces of gold and roughly 1.7 billion pounds of copper.

Minas Conga is a deposit with reserves of nearly 12 million ounces of gold and 3.2 billion pounds of copper. The project has an annual production potential of 480,000 to 780,000 ounces of gold and an expected mine life of 15 to 20 years. Copper production capacity is between 175 million and 225 million pounds and around 90,000 tons of fine copper per year.

Currently, the company is evaluating its decision to develop the Minas Conga mine, which was delayed by the high projected cost of development on the back of global economic and credit crunch last year.

Newmont controls the Yanacocha gold pit with a 51.35% stake while Buenaventura (BVN), the Peruvian precious metals miner holds 43.65%. The International Finance Corporation holds the remaining 5% stake in the mine.

Buenaventura, Newmont’s partner in the Yanacocha mine, is expecting to produce 17.5 million ounces of silver this year, down from an earlier forecast of 19.5 million ounces. The company held its 2009 gold outlook stable at nearly 1.3 million ounces, including its share of production from Yanacocha, one of the largest gold mines in South America. Buenaventura churned out 1.2 million ounces of gold, including Yanacocha and 17.5 million ounces of silver last year.

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